The Securities and Exchange Board of India (SEBI) allowed mutual funds and portfolio managers to invest in commodity derivatives, a move that would boost the commodities market.
“The Board deliberated and approved the proposal contained in the memorandum to enable participation by mutual funds and portfolio managers in exchange traded commodity derivatives in India subject to certain safeguards,” SEBI said in a release after its board meeting in New Delhi.
“Further, Category–III Alternative Investment Funds which are already permitted to participate in Commodity derivatives, have now been permitted to deal with goods received in delivery against physical settlement of such contracts, if any,” the regulator added.
S K Mohanty, whole-time member SEBI had said that participation of mutual funds in the commodity derivatives market would be a game changer.
AMCs can charge additional 30bps applicable on B30 cities only on individual assets i.e. retail and HNI assets.
In a letter sent to AMFI, SEBI has clarified that AMCs can include assets from individual investors – retail and HNIs to arrive at additional TER charged to compensate distributors in B30 cities till the time market regulator defines retail investors.
In fact, the market regulator has given a new formula to the additional TER:
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Source: PTI, Financial Express, Café Mutual
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.